TOKYO- Oil prices edged up on Tuesday, after a sharp plunge in the previous session, as a US plan to purchase oil for the Strategic Petroleum Reserve provided support while investors remained focused on developments in the Middle East.
Brent crude futures climbed 44 cents, or 0.6 percent, to $71.86 a barrel while US West Texas Intermediate crude was at $67.83 a barrel, up 45 cents, or 0.7 percent.
Both contracts tumbled 6 percent on Monday, hitting their lowest since Oct. 1, after Israel’s retaliatory strike on Iran at the weekend bypassed Tehran’s oil infrastructure.
The US on Monday said it was seeking up to 3 million barrels of oil for the SPR for delivery through May next year, a purchase that would leave the government with little money to buy more until lawmakers approve more funds.
“While outlook for the Middle East situation remains alarming, the market is expecting a temporary lull in retaliatory strikes between Israel and Iran,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
“The US plan to refill the SPR provided some support to the market,” he said, but predicted a downward trend ahead as peak winter kerosene demand season in the Northern Hemisphere was still some way off while demand in China remained sluggish.
On Saturday, scores of Israeli jets completed three waves of strikes against missile factories and other sites near Tehran and in western Iran, the latest exchange between the Middle Eastern rivals.
